Cowen hasn’t the courage to end love affair with social partners

Brian Cowen’s government is predicated on the primacy of partnership. We have delayed taking the sharp correctional measures required because the pillars of partnership were in denial about economic reality. What a costly delay. Our national debt is set to pole-vault from €30bn to €70bn in the space of two years.

THE wave of euphoria surrounding Barack Obama’s inauguration reminded me of past political glory here.

Jack Lynch swept to power with a 20-seat majority in 1977. Garret FitzGerald catapulted Fine Gael to the dizzy heights of 70 Dáil seats in the early 1980s. Dick Spring’s wave of success in 1992, following Mary Robinson’s election to the presidency, resulted in more than 30 Labour TDs.

Across the water, after the Thatcher era, New Labour won a massive majority in 1996. I can vividly remember the election night with the exultant party hierarchy singing “Things can only get better”.

On his first day in office, the streets of Downing Street were 10 deep with well-wishers’ outstretched hands to touch Tony Blair.

All these episodes had a palpable sense of hope, change and a new beginning.

Obama deserves every credit. He is a brilliant speaker with a preacher’s eloquence. It is historic to have the first African-American president. His predecessor, George W Bush, had the lowest approval ratings of any recent incumbent. All of these factors justify enthusiasm for a new era.

Will we ever learn? Politics doesn’t do fairytales. There is inevitability about Obama’s fate. Just like Lynch, Fitzgerald, Spring and Blair, Obama will be shown to have feet of clay and will make mistakes.

His economic stimulus package may engulf the US economy in debt. If there were to be another terrorist attack on American soil he would be blamed. Many expectations of those depending on social equity will not be met. Promises on welfare, healthcare and education are unaffordable. History shows that events, circumstances and decisions, rather than appeal and ability, ultimately determine political legacies.

Meanwhile, expectations and legacies at home are shattered. With each passing day, Bertie Ahern’s decade of government is looking less positive. We have squandered the boom with profligate and wasteful spending. Many of the assumptions of the past decade now need to be revisited.

Is Fianna Fáil the most competent party to manage the economy? What are the benefits of partnership? Twenty-two years of it are supposed to have underpinned our economic growth and provided stability for investor confidence in Ireland.

If you say a thing often enough and those saying it are important enough, it is assumed it has to be correct. I don’t accept that. I believe the benefits of partnership were political and social, not economic.

Over the past 11 years Bertie Ahern used the partnership process to marginalise the Dáil. It didn’t matter what happened in parliament because the real action was over in Government Buildings. Once IBEC and ICTU ratified the succession of programmes, the Dáil was reduced to petty bickering and point-scoring. This elevated the authority of union bosses and employer groups.

Pay negotiation was extended into social policy and lawmaking. A new generation of quangos was established through partnership. Hundreds of ICTU and IBEC nominees were appointed to a myriad of State boards. The most visible of these over recent months are Fás and the Financial Services Regulatory Authority. This was not because of specialist qualifications, but rather their belonging to partnership. This consensus insulated Bertie politically. Criticism of partnership was unpatriotic.

If we now examine this arrangement we will see that it does not stand up to scrutiny. Economically, it presided over a decade of deterioration in Irish competitiveness. The price of partnership has been bench marking, inefficiency and excess costs. The trade-off between jobs and pay is proven. This month the official jobless total will surpass 300,000. Current forecasts estimate it could exceed 400,000 by the end of this year.

Proponents of partnership claim that in the late 1980s, it was responsible for rescuing the nation. Truth is there were no other financial options with the IMF knocking at the door. Politically, the Tallaght Strategy, electoral success of the PDs and Haughey’s renewed leadership meant tough decisions were taken. We are now at a similar moment in our nation’s history.

Brian Cowen’s government is predicated on the primacy of partnership. We have delayed taking the sharp correctional measures required because the pillars of partnership were in denial about economic reality. What a costly delay. Our national debt is set to pole-vault from €30 billion to €70bn in the space of two years.

We are increasing the State debt by €5,000 for every man woman and child in the country. This is the most rapid increase of public debt of any country in the first or third worlds, relative to GDP.

This is unsustainable. It’s unacceptable that we had to wait for our deficits to explode before remedial action could be decided upon. We have to pay a 2% interest premium because this delay has reduced our national credit rating. After all the analysis, debate and conclusions about fiscal rectitude what do we find?

The job of ICTU is not to run the country. They exist to protect the pay and conditions of their members, particularly in the public sector. This is perfectly reasonable. David Begg, Jack O’Connor and Peter McLoone are professional career trade unionists whose obligation is to safeguard and protect their members’ rights, terms and conditions. Partnership or not, there will always be public and private sector pay agreements as well as free collective bargaining. That process existed before the partnership era and will of course endure. These union leaders have no mandate to put the national interest before that of their constituents.

IBEC represents the negotiating arm of larger employers. These include the banks, State-sponsored bodies and the construction industry. The ESB is a member. It recently paid the 3.5% increase to its super-secure staff with an average salary of €70,000 a year. Meanwhile, the majority of employers in the service sector, who created the new jobs for the Celtic Cubs, are not affiliated to IBEC.

I FEAR the Government lovers of partnership would prefer to increase the minimum wage even if it results in extra unemployment. They always choose to raise taxes rather than implement spending cuts. They may opt to minimise the cutbacks to €2bn this year and thereby extend the recessionary period in Ireland. All economic data now suggests 2010 will be even more difficult than this year. Yet we are told €4bn of cutbacks are preferable in 2010 and 2011 respectively.

For every minute of Cowen’s and his colleagues’ tenure as ministers they have cherished partnership as if it were a replacement for democracy. Our system of government works on the basis of the mandate coming from the people through parliament to the executive office. Partnership didn’t help secure a yes vote in the Lisbon Treaty referendum. Maybe when it matters most, partnership suits itself rather than the national interest.

At all costs some opaque formula of compromise will be found in the coming weeks to keep partnership alive. It has become more important than the service it provides. Cowen hasn’t the courage to kiss it goodbye — let alone face it down. Maybe I should ignore political history, join the crowd and live in the hope that Obama can save us all.

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